Emerging markets of today are represented by companies with international growth ambitions and new opportunities to be exploited. This study explores the characteristics of the Italian Foreign Direct Investment (FDI) in India and aims to fill the gap identified in literature by providing a comprehensive empirical analysis of this issue. The study specifically focuses on the localization drivers of Italian MNCs that internationalized in India. In order to investigate the research questions, a unique database of Italian firms that invested in India was created. The number of Italian companies with subsidiaries in India was found to be low. In terms of geographical distribution, the sample showed prevalence in New Delhi, followed by Mumbai and Bangalore. The main driver for localization choice was found to be the general economic importance of the city, and a majority of the sampled companies chose the place of establishment of their Indian subsidiary mainly based on the location of their clients (prospect and actual). This data was consistent with the idea that ‘market seeking’ is the primary strategic goal for the companies analyzed. A typical ‘multidomestic’ approach was adopted by customizing products and services to the local needs and demands. This supports the progressive embeddedness of the subsidiary into the local market. Under this perspective, FDIs could also represent a way to access local knowledge to be combined at a global scale to contribute to the overall performance of the MNC.

By the end of the 1980s, most internationally oriented companies realized the urgency of moving into the far east, and Italian MNCs are part of this trend. The growth and potential of Asia had been obvious for a while, but what had changed were the barriers to foreign companies: Asia as a whole was opening up to the outside. Of all the Asian countries, China has made the strongest effort to entice western companies to invest in their country, while at the same time providing the largest market (in terms of population) in the world. By the end of the 1990s, every company that wanted to be a serious global player had some sort of presence in China. For a number of reasons, India was overlooked until a few years ago. However, it is still being overlooked, especially by Italian companies, when compared to any other BRIC (Brazil, Russia, India and China) nations.

This study aims to analyze the characteristics of the internationalization process of Italian companies in India. More specifically, the localization choices of Italian MNCs. The purpose of this study is extremely relevant if we consider that there is a substantial lack of literature/empirical studies on Italian companies that internationalize in India. While many scholars have carried out several empirical studies on Italian MNCs operating in foreign markets1, only two studies dealing with Italian MNCs in India2 were found.

Knowledge Management Journal, Italian Foreign Direct Investment, Multinational Enterprises (MNEs), Foreign Direct Investment (FDI).